5 ways to spot an IRS private collection scam

The IRS announced Tuesday it will start using private collectors to contact taxpayers with long overdue debts.

The new program was created by a federal law enacted by Congress in December of 2015. It allows designated private companies to collect unpaid tax debt that are currently not being worked on by IRS and that were assessed by the tax agency in previous years.

Several hundred taxpayers will start receiving mailed letters and phone calls this week. The program will reach thousands a week after.

Of course, a private collector program always opens up more opportunities for scammers to take advantage of taxpayers.

Here are 5 things you need to know to avoid getting conned:

1. You'll only be contacted if you have longstanding tax debt. The taxpayer accounts assigned to the private collectors should already know they have longtime unpaid taxes. They would have had multiple contacts from the IRS in previous years.

2. The IRS will contact you first. The IRS will notify a person before transferring their account to a private collector and send a letter with the name and contact information of the company. The mail will include a copy of the publication, "What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency". You will NOT receive a phone call without initial paperwork from the IRS confirming tax amount owed.

3. There are only four private groups participating in the program: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. The taxpayer will only be assigned to ONE group. No other group other than the four listed is authorized for private collection by the IRS.

3. Private collectors should be able to identify themselves as IRS contractors. Once the IRS has notified a taxpayer about the transfer, the private company will send their own letter and a representative confirming the transfer. The private firm's letter should contain the same information detailed in the IRS letter to assure taxpayers the contact is legitimate. The collectors must still respect taxpayer rights and follow the provisions of the Fair Debt Collection Practices Act. For example, collection agencies can't call a person's work or use profane language. The calls they do make are limited to certain hours.

4. Only send payments directly to the IRS. A taxpayer can only be asked to make a payment to the IRS or the U.S. Treasury. While private collectors are authorized to discuss payment options, checks should NEVER be made out to a private company or an individual. Checks should only be made payable to the U.S. Treasury.

5. Private collectors are not authorized to take enforcement action against taxpayers. Only IRS employees can file a notice of Federal Tax Lien or issue a levy. Neither the IRS or its contractors will ever:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.

Threaten to bring in local police or other law enforcement groups to have the taxpayer arrested for not paying.

Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Ask for credit or debit card numbers over the phone.

If you're unsure if you have unpaid taxes from a previous year, you can check your account balance at www.irs.gov/balancedue.